Canadian retailers bet on technology in fight with U.S. giants

Mon Sep 8, 2014 3:54pm EDT
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By Sayantani Ghosh and Solarina Ho

TORONTO (Reuters) - Canadian retailers, scrambling to keep pace with the likes of Wal-Mart Stores Inc WMT.N and Inc AMZN.O in an increasingly crowded market, are investing heavily in high-tech tools to lure shoppers.

Companies have ramped up their efforts to address consumers' evolving shopping habits and to compete with rivals such as Wal-Mart, which is pouring more than C$30 million ($27.4 million) into Canadian e-commerce projects this year.

Canadian Tire Corp CTCa.TO, Hudson's Bay Co HBC.TO and Metro Inc MRU.TO are among those making technology investments.

The tools, which include data analytics, mobile apps and online stores, have long been used by U.S. retailers in their home market. Now, Canadian companies are recognizing them as essential.

"There is now a real, 'Oh, my God, we have to play catch-up really fast,' because there's this threat of all these U.S. retailers increasing their dominance in the Canadian market," said Forrester Research analyst Peter Sheldon.

He said Canadian retailers were in a "dire state," with little e-commerce presence until about a year ago, but the landscape has improved dramatically.

Canadian shoppers spend an average of C$954 annually online, according to market researcher Ipsos. Eight in 10 Internet users will make an online purchase this year, Ipsos said.

Online retail sales in Canada are expected to reach C$34 billion by 2018, according to Forrester, representing about 10 percent of retail transactions, up from 7 percent in 2013.   Continued...

A man holds a smartphone in this photo illustration showing the Canadian Tire app in Toronto, Ontario, September 5, 2014.   REUTERS/Mark Blinch